The timing was almost perfect: on August 15, India celebrated the 75th anniversary of its liberation from British rule. On September 3, the Bloomberg news agency analyzed the latest economic statistics and concluded that India’s economy had overtaken that of the United Kingdom, placing it in fifth place in the world table.
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A deep resentment of British rule adds to the times in India. It is surprising to see that it is found in equal measure on the right and the left, between Hindus and Muslims, between religious and secular. The resentful believe that the British brought only evil. They attacked, for example, Hollywood five years ago, when it awarded six Oscars to a film about Winston Churchill. A famous Indian politician who defected to the Nazis, and was close to Heinrich Himmler’s desk in Berlin during the war, enjoys the status of a national hero in India.
It is therefore easy to imagine how great the satisfaction was, when India passed the “colonial mistress”. “Proud moment for India to bring in 3.5 trillion dollars to the UK, compared to 3.2 trillion dollars,” tweeted Uday Kotak, CEO of Kotak Mahindra Bank. However, he was quick to remind his followers of the demographic ratio. “India: 1.4 billion against 0.068 billion in the UK. From here, the GDP per skull is $2,500 compared to $47,000. We have a long way to go.”
Proud moment for India to pip UK, our colonial ruler, as the 5th largest economy: India $3.5trn vs UK $3.2trn.But a reality check of population denominator: India: 1.4 bn vs UK.068 bn.Hence,per capita GDP we at $2,500 vs $47,000. We have miles to go…Let’s be at it!
– Uday Kotak (@udaykotak) September 3, 2022
Senior businessmen in India reveled in the numbers. “Now we have become the fifth largest economy in the world!” Tweeted Anil Aggarwal, chairman of mining giant Vedanta. “What an impressive milestone for India’s fast-growing economy.” In a few years we will be among the top three!” Agarwal’s victory tweet was less interesting than some of the comments on it. One commenter mentioned a World Bank announcement that India had become the “third largest economy in the world” back in 2011. Another mentioned that the annual income per capita in India It is only a fifth of that of China.
We just became the 5th largest #economy in the world, surpassing UK! ????Just????Just????Just now
What an impressive milestone for our rapidly growing Indian economy…In a few years, we will be in Top 3! 刚刚— Anil Agarwal (@AnilAgarwal_Ved) September 3, 2022
A cartoonist in the Indian newspaper “Asian Age” drew India as a tortoise passing old rabbits. The rabbits are the world’s economies, which sank in the corona, energy and inflation crises. This is of course true. India is indeed emerging, at least for statistical purposes, from the deep crisis into which Britain sank. It will emerge borrowed, again only for statistical purposes, from the impending recession in Germany. They will shrink, and she will grow, because a country of 1.4 billion people must grow. If it does not grow, in rapid leaps, it will have difficulty feeding its multiplying inhabitants.
A cartoon in the Indian newspaper Asian Age describes India’s passing over Britain as the victory of a tortoise over old rabbits. The rabbits are the economies of the world
Here’s what we can conclude from this historic landmark: it tickles our nostrils, it reminds us of India’s enormous growth potential; He obliges us to admit that the world is changing, and the centers of political and economic power are moving east and south. But it is not far from bringing India closer to China’s relative success story, or to the level of the great industrial powers of the West. Still a vision for the time being.
Concretely, growth in India is showing signs of slowing down. This is an enviable slowdown, because it puts India far ahead of the rest of the world, 13.5% in the 12 months leading up to the current quarter. However, its central bank predicted 16.2% growth. The growth in the previous year was 20.1%, and the growth in the first quarter of the year was 4.09%. The national currency, the rupee, is now trading at about 80 to the US dollar, its lowest rate ever. This is happening despite the massive intervention of the central bank.
The water flooded Bangalore
Although this week began with a collective pat on the back of India’s economy, it continued with reminders of its fundamental weaknesses. Take for example Bengaluru, known to foreigners by its former name, Bangalore. It is the capital of the state of Karnataka, in southern India, and is also the capital city of India’s high-tech industry. Israelis from “Silicon Vadi” know her well.
Bangalore is one of the 46 high-tech centers of the world, second in Asia only to Shanghai on the Cushman-Wakefield list (cushmanwakefield.com). It has more computer programmers per square meter than anywhere on earth. According to this list, their number reaches almost 214 thousand (a slightly distorted proportion, but that’s the situation). Bangalore’s tech campuses are no match for Silicon Valley’s.
Well, earlier this week the water drowned Bangalore. The city of 13 million inhabitants succumbed to a historic flood. Its streets and houses were flooded, its cars drifted to another place, the electricity supply to parts of it stopped, the Internet went silent, and the hand of the local government is short of saving. The photos on the front page of “Times of India” speak for themselves. An Indian technology CEO shared Mr. Despair with the BBC. Is she considering moving to another city? The interviewer in London asked her. “I’m considering moving to another country,” she replied.
The city of technology is drowning in a flood of troubles,” declares the Indian newspaper “Times of India” on September 6 following the heavy disaster in Bangalore
Let’s not exaggerate. One natural disaster does not bring winter. But when we talk about the rise of India, especially in the high technology industry, it is a bit difficult to miss the connection between it and the state of the infrastructure. Bangalore is not the only city in the world paying a heavy price for climate change this summer. It can be found in Asia and Europe. But the disaster cannot be attributed to nature alone. Neglect and lack of vision characterized the management of this key city over the years.
hundreds of millions behind
India has indeed made impressive progress in various fields in the last 30 years, since economic reforms began. However, her progress was never balanced. It has grown a huge middle class (larger than the entire US population), but has not devoted the attention and resources to the infrastructure that will contain this class.
She left hundreds of millions behind. We saw the misery of those left behind in the first months of the Corona virus, when Indian cities were closed for business, and millions of hard-working laborers had to return to their home villages, often on foot, for days or weeks. Her government boasted that it had marketed vaccines all over the world, but when the second wave of the Corona came – Indians were dying in parking lots in front of hospitals because they had no oxygen, or medicine, or beds.
On the other hand, India has indeed recorded considerable achievements in the development of vaccines for 11 diseases. An investigation in the medical journal The Lancet estimates that India’s vaccines have saved the lives of 37 million people in the last 20 years. Amazing is the amazingly low cost of the Indian vaccines. For example, a vaccine serum developed against pneumococci, the bacterium that causes, among other things, meningitis, costs less than three dollars.
The sky is the limit for India’s progress, but at the moment it is too close to the ground. She crawled on the ground until the end of the 80s. Her political and economic philosophy cleared the habitat of the Congress Party, whose ethos was anchored in the equality of poverty. India’s GDP figures for the first 20 years of its existence speak for themselves: annual growth of two to three percent.
The liberalization of the Indian economy began in the first half of the 1990s. Not coincidentally, this was also the time when India removed the taboo and established full diplomatic relations with Israel, which developed in dramatic leaps. It is not at all an exaggeration to claim that Israel’s relationship with India is second in importance only to the relationship with the US, especially in military and security matters. It is hard to say that the Indian factor enjoys the attention it deserves in Israel’s politics, media and public opinion.
A professional economist was Manmohan Singh, Prime Minister of India between 2004 and 2014. However, he was without a political base, and his communication skills were limited. He belonged to the Congress Party, a distinctly Indian equivalent of the historic Mapai. Its rise, reign, decline, and flickers of decline occurred almost simultaneously. to add and hold it, but it fell out of her hands – and passed to a religious-nationalist party, the “People’s Party of India” (BJP).
Cynical smiles
For the last eight years, India has been ruled by Narendra Modi. His charisma produced unprecedented electoral victories. The Indians forgave him for grave sins. He has deep contempt for the secular liberal values of the Congress party. It increased political and religious polarization, and lowered India’s stature in the global democratic camp. But he made it an essential and desirable partner in the international arena.
He is a cynic with lots of smiles, who willingly embraces Vladimir Putin and the leaders of the West, the Prime Minister of Israel and the President of Iran; Sends his army to joint maneuvers with Russia and China, and then sends his navy to maneuvers with the USA, Japan and Australia; equips himself with modern weapons from Russia, the USA, France, Great Britain and of course also from Israel.
From home, Modi and his men are tightening their belts. Freedom of speech is reduced, and the signs of harassment of freedom of association and activity are increasing. The central government is increasingly using the federal police (CBI) to crack down on political opponents. It is trying to topple opposition governments in individual states of India (there are 28 of them). She encourages personality cult of Modi. Last week, the finance minister in the central government reprimanded a shop for the poor in the opposition country for not hanging a picture of Modi in his office.
The government’s nervousness is growing, because regional parties (as opposed to national parties) are tightening their cooperation ahead of the 2024 elections.
“The time has come to oust the Modi government,” declares the Prime Minister of the state of Telangana, Chandrashkar Rao, who promises to establish a “peasant government” in 2024
It is evident that this government believes that the way to the start of the Indian economy is through a centralized government. This is not an easy matter in Israel with a long tradition of regional pluralism. The Congress party tried to establish such a government in 1975, through the suspension of democracy. It didn’t work, but maybe because she tried to do it overnight, throwing thousands into prisons and silencing all her opponents. Centralization in Modi’s India, on the other hand, is proceeding step by step, and sometimes piece by piece.
The most successful economic reforms in Asia have occurred under centralized, or corporatist, governments: in Japan, South Korea, Taiwan, and China. Except for Japan, the governments were dictatorial, at least until the end of the 1980s. Does India need such tools, in order to unleash its potential? No leader has expressed such an opinion, but the actions of the ruling party cast doubt on its intentions.
The prime minister of the state of Telangana, in southern India (of which the city of Hyderabad, a major technology center, is its capital), is currently in the crosshairs of the ruling party. He returns fire. “BJP spreads hatred,” he says of the ruling party, and promises to sweep it out of Delhi in 2024, and replace it with a “peasant government.” He even announces that he will not allow the use of the federal police against the activists of his party. An attempt to realize this promise will test the very constitutional framework of India.
A year and a half of many events awaits India. A giant struggle is about to take place in her over the government, over the image of her society and the future of her economy. It’s worth watching, and also holding your breath.
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